54 days remain in the 87th Regular Legislative Session.

This is just a reminder that the Texas School Coalition will host a legislative update today, Wednesday, April 7, at 2:00 p.m. Thank you for registering in advance! You should have received your personalized link to participate. If you need any help with that, please simply email christy@txsc.org and we will re-send that information your way. We're looking forward to seeing you at 2:00 p.m.!

The Texas Senate gave unanimous approval to the state budget bill, SB 1, on Tuesday. Bill author and Senate Finance Chair Senator Jane Nelson (R-Flower Mound) presented a budget not all the different from the bill filed in January.  

Senator Larry Taylor (R-Friendswood) who chaired the workgroup on Article III Public Education, laid out the provisions related to education. He emphasized that this bill fully funds HB 3. He reminded the body that there were times during 2020 when it looked like full funding would not be possible. This budget spends an additional $3 billion to fund enrollment growth and an additional $1 billion to fund continued property tax compression, which Taylor explained are on top of HB 3 funding.

In response to questions from Senator Eddie Lucio (D-Brownsville), Taylor spoke to the fact that federal funds were used to supplant state funding for schools last spring. He also acknowledged the COVID slide, that many students are behind and need immediate help to catch up, as well as the fact that federal funds are coming (though potentially with strings attached) that could be used to help. 

Senator Royce West (D-Dallas) inquired about specifically who will make decisions regarding what will be funded with federal dollars. Taylor explained that the state is applying for some waivers and referenced the concerns raised during the Senate Finance Committee hearing over a week ago regarding whether the state’s maintenance of effort applies to funding for public and higher education combined or separately. Taylor expressed concern over the state potentially having to spend $700-800 million more per year on higher education. He went on to tell West that any such additional spending on higher education may not be spent on tuition, facilities, or research, so the state is not clear what they can spend dollars on for higher education, if not one of those three things.

Taylor said that Education Commissioner Mike Morath is serving as the chief negotiator with the feds, and working with Higher Education Commissioner Harrison Keller to figure things out. West emphasized that he wants to ensure schools use the dollars to benefit students and that funds are used to address one-time needs since the funding will not continue. Taylor echoed that and said schools should not complain about funding cuts in two years as all were advised the federal funding is one-time only.  

Finally, Senator Jose Menendez (D-San Antonio) questioned if the Senate’s budget includes language similar to the rider adopted in the House to address that funds should be used to supplement rather than supplant. Taylor said he didn’t think such language is needed because the most recent federal bills don’t allow for the funding to be supplanted.

Once SB 1 passed the first chamber, it was received in the House and referred to the House Appropriations Committee, where it is expected to be considered in short order, as the committee has already completed their work on their budget proposal.  

The House Public Education Committee made it all the way through their list of 38 bills yesterday. Here are a few details to note:

Rep. Dan Huberty (R-Humble) laid out his bill on school district fund balances, HB 3445, which would require districts deemed to have "excess revenue" (meaning cash on hand in excess of 110 days of operating expenses) to use those funds to pay down debt, lower the district tax rate, provide additional employee compensation, or pay for deferred maintenance. FSP reductions and bond elections/issuances prohibitions apply for schools that do not comply.

Huberty began by telling the committee how much fund balance amounts have increased over the last decade. He explained that total school fund balances for districts statewide exceed $21 billion, and that $6.6 billion of that amount is in excess of operating expenses for 110 days.  Huberty took particular offense to the $600 million growth in fund balances after the passage of HB 3, and said he doesn't think the state should continue to pay for districts asking for more money or to be held harmless if all districts do is put money in their bank accounts.

Chairman Ken King (R-Canadian) offered a strong response to Huberty's opening statements. King reminded Huberty that not every district gained additional funding under HB 3, and that he represents some districts that lost funding. This is on top of the cuts from 2011, the loss of ASATR, the move from prior year to current year values, and so on. King acknowledged steps should be taken to address any bad actors out there, but said he is very concerned we are going to punish effective conservative stewards of tax dollars with this bill.

Rep. Gary VanDeaver (R-New Boston) echoed King's comments and said he shares frustration with bad actors but wants to be careful.  He cited what he called a pattern of “yo-yo funding” from the state.  VanDeaver applauds districts that are being wise, cautious managers.

Huberty said he’s sick and tired of schools coming to complain about not having the resources they need. If his bill is not voted out of committee, Huberty vowed to find a way to amend it onto someone's bill on the House floor because he believes this issue should be brought before the full House. He wants to draw attention to and shine a light on this issue. 

Click here if you need help with some talking points in regards to the topic of fund balances.

On Thursday at 7:30 a.m., the House Appropriations Committee will hear HB 2, the Supplemental Appropriations Bill. That bill, which must pass every session, updates state appropriations in the current spending cycle to make adjustments for savings. As you may recall, the filed version of this bill includes the $5.4 billion in state savings from public education. Sources of savings included. This included $1.3 billion from higher than expected recapture, $1.5 billion from higher than expected property values/property tax collections, and $1.2 billion from the supplantation of state funds with federal ESSER I dollars. Supplemental appropriations bills aren't all about state savings though; they can also spend additional dollars in the current biennium. For example, this bill could be amended to spend ESSER II dollars in the current biennium to allow schools to use those dollars for the purpose of summer school in the summer of 2021. Please note: we're not saying this will happen on Wednesday...just that it could if legislators made that choice.

Speaking of federal funding...on Wednesday, the committee will also hear HB 2021, which establishes a Board on Administration of Federal Funds consisting of the Lieutenant Governor, Speaker, Chairs and Vice ­Chairs of Senate Finance/House Appropriations Committees. This Board would determine acceptance or rejection of federal funds that are not included in the appropriations bill before the Legislature adjourns, and they may also determine a state agency to which assign authority for the spending of such dollars.

The Senate Committee on Education will hear the Senate version of the “HB 3 Clean-up Bill,” SB 1536 by Senator Larry Taylor (R-Friendswood) on Thursday. We expect there to be a committee substitute of this bill (similar to the House version of the bill), and we will update you on any changes.

You can access our section-by-section of the bill that goes through all the details and compares the filed versions of the bill to the House substitute.

The Senate Committee will also hear bills on Thursday covering topics such as allowing transportation allotment dollars to cover the expense of transporting food and instructional materials to student homes (SB 462 by Lucio), financial literacy & economics curriculum, professional development, and more. They will also here SB 1522 (Taylor), which clarifies that the adjustment of instructional days for a calamity may not exceed the days equivalent to one school year and allows commissioner to divide the adjustment between two years.